Magic Man: For his next trick, Salon's David Talbot will keep his E-magazine afloat.

Salon Keeper

The rumors of Salon's demise are greatly exaggerated, according to founder and editor in chief David Talbot

By Loren Stein

DAVID TALBOT is the Houdini of the new-media age. Every time the seconds tick down on Salon, his 8-year-old online magazine, he throws off the chains and masterminds Salon's survival by securing an infusion of new cash, if only to tide the publication over for a few months.

It's a high-wire act that defies conventional wisdom, including the crash and burn of virtually every other online journalism enterprise not bankrolled by a big corporation. While predictions of Salon's imminent collapse keep making headlines--including recent reports that the firm was so strapped it couldn't pay its back rent--Talbot repeats his mantra: "We're on the edge of profitability."

"Salon has consistently brought a different perspective and type of reporting to the key events of the last several years," says Salon's founder, chairman and editor in chief, who speaks at San Jose State University on Tuesday. "Most of the media is in the hands of four or five global corporations, and so it's rare for an independent site or news operation like Salon to exist. But we do, and we're persevering."

Talbot, a published author who has written for The New Yorker, Rolling Stone and Playboy, was formerly a senior editor at Mother Jones and the arts and features editor for the San Francisco Examiner. Feeling stifled by mainstream journalism and itching to get in on the ground floor of the web revolution, he co-founded Salon in 1995 with several veteran colleagues from the Examiner. His vision: to create on online alternative voice that would appeal to high-end readers with smart, original, hard-hitting stories ranging from politics to culture and society--and beat out the established media at the same time.

To that end, it succeeded, sometimes brilliantly. Salon's coverage of special prosecutor Kenneth Starr's Whitewater investigation and Bill Clinton's impeachment, and its controversial scoop revealing Republican Sen. Henry Hyde's extramarital affair, vaulted the site into national prominence. Salon also distinguished itself with its stories on the 2000 presidential election, as well as on 9/11 and the war on terrorism.

Despite editorial
success and high praise, Salon, like many Internet publishers, has never
managed to turn a profit and has been teetering on the edge of insolvency
since the dotcom meltdown. Salon's share price is so low it was delisted
from Nasdaq in November. Salon has also run up $81 million in losses since
1995. What's been the biggest surprise running Salon? "That we're still
here," says Talbot, laughing. "[And] that's it been so hard to establish
a viable business model on the web."

Since going public in 1999, Talbot and his team have tried everything to keep the company afloat. They've cut costs to the bone (Salon's annual budget went from $35 million at the height of the dotcom boom to $7.5 million currently); canned employees, including half of its editorial staff (now down to 26); and now ask readers--who were accustomed to free content on the web--to ante up for paid subscriptions. (Nonsubscribers can now get a free "day pass" to the site by agreeing to view a sponsor's multiple-screen advertisement.) Moreover, a succession of last-minute financing deals--including $800,000 from two longtime investors in late March--has, so far, rescued the site from extinction.

Throughout the ups and downs, Salon's audience holds steady, Talbot says, and subscribers now number more than 60,000, which, for the web, he says, is a considerable achievement. Although it delayed the move to an active revenue stream, paying for content was in Salon's original business plan, he says.

"We weren't kids--we'd been around the media world--and we knew we couldn't depend solely on advertising. But boy, when we hit the wall like everyone did and started to lay people off, we thought: We've built a pretty good editorial operation here that over 3 million people click on every month; we've invested a lot in building this product, and if it's worth anything to the readers, we've got to test it. It was a calculated risk."

He doesn't regret asking readers to pony up for content. "It's worked--slowly, because people resisted it. They don't want to pay for stuff online, unless it's porn or finance. But people are so hungry for alternative sources of news, and they're so sick of the rightward drift of the media, the 'Foxification' of the media, that they're willing--kicking and screaming--to pay for Salon."

Reports by other media outlets about Salon's troubles are often characterized by a distinct lack of sympathy, including those by his former cohorts at the Examiner, who now work at the San Francisco Chronicle. "The coverage is excessive, given the size of Salon; we're treated as if we're Apple [Computer]," Talbot says. "Every up and down in our financial story gets covered on the front page of the business section. I think they want to make sure that whenever we suffer a financial setback the whole Bay Area knows about it."

He also attributes the backstabbing to a general feeling of resentment by the mainstream media toward web journalists. "There was a lot of hype about the overnight fortunes we would make and how our lives would be completely different, and of course, some of us crowed about this ... that we were the glorious shining future of journalism," Talbot admits. "So once a lot of those dreams got shattered, there was a feeling that we were getting our just deserts by being brought low.

"Many of us, not just at Salon but in dozens of other web operations, were trying to make journalism more interesting, to open it up and let in some fresh air and allow journalists to think more creatively and independently. And all journalists should have been cheering that."

And that's precisely what Talbot's message to young journalists will be when he speaks on the "Future of Online Journalism" at SJSU on April 15. "Don't sell yourself short, think big," he says. "[Salon] is my dream, my passion. ... It's a labor of love. When I'm making that 15th readers' appeal, I sometimes feel like I've become a marketing person, rather than an editor. There are days when we're all at the end of our rope, but there's nothing else I wanted to do more."

David Talbot will speak at San Jose State University's Magazine Day on Tuesday (April 15) at 1pm at the Loma Prieta Room inside the Student Union Ballroom. The speech is free and open to the public.